√Ford posts $1.28 billion loss following closure of autonomous driving tech company

Despite billions of dollars and promises of self-driving cars by 2021, Argo AI is shutting down.

US car giant Ford has blamed a large portion of its latest billion-dollar loss on the failure of one of its autonomous driving divisions.

Business website TechCrunch this week reported start-up Argo AI is shutting down, with parts of the business to be split up and integrated by Ford and Volkswagen – its two main financial backers.

The Pittsburgh-based Argo AI began in 2016 as an autonomous driving tech company with a billion (US) dollars of backing, with both Ford and Volkswagen tipping in the majority of the $US3.6 billion ($AU5.56 billion) raised by Argo AI in the years since.

In Ford’s latest financial reporting, the car giant says it recorded a $US2.7 billion ($AU4.18 billion) non-cash, pretax impairment on its investment in the start-up, with a net loss of $US827 million ($AU1.28 billion) recorded for the third quarter of 2022 (July to September).

It’s not yet known what losses Volkswagen have suffered following the closure.

Ford CEO Jim Farley now concedes widespread adoption of autonomous vehicle technology is “a long way off,” despite Argo ambitiously expecting to bring self-driving cars to market by 2021.

MORE: Ford ‘overestimated’ the capabilities of first-generation autonomous vehicles

“But things have changed, and there’s a huge opportunity right now for Ford to give time – the most valuable commodity in modern life – back to millions of customers while they’re in their vehicles,” Mr Farley said.

“It’s mission-critical for Ford to develop great and differentiated [Level 2+] and [Level 3 autonomous driving] applications that, at the same time, make transportation even safer.”

During an all-staff meeting at Argo AI, employees were told they would be receiving a generous severance package, with some to be extended offers by Ford and Volkswagen.

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